Looking to do a kitchen or bathroom remodeling project? Now may just be the perfect time, and refinancing may provide the perfect means.
“As we have seen in the financial market news, a continued low interest rate environment is beneficial to borrowers at this time,” says Janice Sheppard, Senior Vice President of Real Estate Services with DATCU Credit Union. “Many homeowners are opting for a home loan refinance and taking cash back to themselves for large expenses.”
Deciding if refinancing is a good option depends on many factors, Janice says.
“Options depend on the mortgage balance, current interest rate and how long individuals plan to stay in the home. For home improvements on a larger scale, such as putting in a swimming pool, then a cash out refinance or Texas Home Equity loan may be an option. A mortgage would be placed on the home. A cash out Texas Home Equity loan has very specific state rules on how much you may borrow; it is limited to 80% of the home’s market value. (Another) option may be a home improvement loan dedicated to repairs, remodels and/or structural changes to the home,” she says.
When considering refinancing, Janice suggests asking lenders about shorter terms, 15-year or 20-year mortgages.
“Many folks don’t know these shorter term loans may help save thousands of dollars if the borrower is already paying for the refinance. The monthly payment may be higher, but the savings in interest and the building of equity in your home is important to look at,” she says, adding that credit unions often offer more affordable options for homeowners.
“Credit Unions may offer lower rates and fees in a home loan transaction. In addition, they have knowledgeable and caring staff that work with borrowers to support their financial goals,” she says. “The Credit Union folks really care and work to help educate and deliver great service.”
DATCU is a local credit union that has been serving North Texans since 1936. Those living or working in Denton, Wise, Cooke, Montague or Clay Counties are eligible to join DATCU, which has 12 convenient branch locations. “Great rates, outstanding service, and a commitment to helping you reach your financial goals is what you will find at DATCU,” says Janice.